Tax saving schemes and how a Man is taxed more
Taxes / Jul 19, 2022
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The practice of tax deduction was started long back for the welfare of the people, helping the downtrodden and helping in the maintenance of the nation worldwide. In India, taxes and duties levies have been collected in different ways in different centuries by Kings and Mughals empires.
After that, the British Government also implemented various taxes in India. Since the independence of India, new records are made every year in the collection of taxes, whether it is a direct tax or indirect tax. However, one thing has always been observed that the tax burden has been more on men than women, but it does not mean that women do not contribute to the nation’s development and reduction of poverty.
It is widely recognized that developing countries raise substantial revenue from taxes for policies for the building and development of their nation and rely on taxation to finance government expenditure. The female workforce is not in equilibrium with the male workforce; equal revenue contribution. Gender equality is an essential factor.
There are countries with higher income tax rates than India, but in those countries, taxpayers have access to services that either never existed or did not exist in India. Public education – from school to college – and public healthcare have disappeared from the life of the urban middle class. India’s private spending on education and health is among the highest in the world – in a country where the wealthiest 10% of the population is poorer than the poorest 10% in America.
Secondly, non-awareness of Proper Tax saving programs lead to more taxes; many schemes and investment plans are available where the saving of tax on your increased income is available. A few of them are:
ELSS or Equity Linked Saving Schemes
ELSS funds are similar to mutual funds where the locking period is 3 years. Individuals and HUFs can claim deduction under section 80C, subject to the maximum exemption limit of Rs. 1,50,000/-.
Public Provident Fund (PPF)
PPF is a good option for returns, and it is tax-free. We can make lump sum or small regular investments with PPF. The declared PPF investment ROI for the current year is 8.7%. Hence PPF returns are mostly at par with inflation.The tenure of the PPF account is 15 years which can be extended up to 5 years at a time. However, money cannot be withdrawn from PPF accounts except under certain conditions. PPF accounts can be maintained with bank, post office, and online applications.
National Pension Scheme (NPS)
The National Pension Scheme is a safe option. Nevertheless, cannot make withdrawals until they reach 60 and the corpus amount must be mandatorily invested in an annuity. Withdrawals are taxable at that time. Contributions up to Rs 50,000 are eligible for section 80CCD(1B) deduction. You can invest through a specified list of NPS fund managers with points of presence operated through banks.
Senior Citizen Saving Scheme
The senior citizens savings scheme is specialised aiming at senior citizens to save tax. It can only be opened by people who are above 60 years old. There is a maximum cap of 15 lakhs and a lock-in period of 5 years. May withdraw the money before subject to penalty as follows:
More than 1 year but less than 2 years – 1.5% of deposit amount.
More than 1 year but before maturity – 1 % of deposit amount.
This scheme is offered via the post office. Investments up to Rs 150,000 are eligible.
Other Tax Saving Investments and Expenses
In addition to voluntary contributions, there may be some forced savings/expenses that already qualify for tax savings.
a. Tuition fees for children: Tuition fees for up to 2 children are covered under section 80C. Please note that this only includes tuition fees, not development fees or donations.
b. Home Loan Principal Repayment: Assesee are eligible for tax exemption for the repayment made towards home loan principal. Note that the interest component is not eligible for tax benefits.
Furthermore, many more deductions are available with various sections from 80C to 80U. Within which various reasons make men more taxed. Hence, we advise every taxpayer to plan his revenue receipts with the beginning of each financial year, as a result of which the taxpayer avoids heavy tax calculations.
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